Audit of the Millennium Challenge Corporation’s Financial Statements, Internal Controls, and Compliance for the Period Ending September 30, 2009 and 2008

Recommendations

Recommendation 1.1

We recommend that the MCC Department of Compact Implementation and Division of Finance:
Strengthen the monitoring of the MCA audit process, from submission of the audit plan through issuance of the audit report to ensure timely completion and sufficient time for OIG review, prior to issuing the report to MCC for management comment.
Increase communication between the MCAs, the audit firms, and the OIG to ensure all parties are adequately informed of the progress of all audits in a timely manner. Ensure that the MCAs understand the impact of these audits and how they affect MCC's assessment of overall controls and its financial statement audit.

Questioned Cost:
$0
Close Date:
Recommendation 1.2

We recommend that MCC management, in coordination with the U.S. Agency for International Development (USAID), establish effective and periodic communication with MCA and Threshold mission personnel, to emphasize the need for proper documentation to be maintained in the MCA files, and that these documents are readily available and promptly submitted for inspection when requested.

Questioned Cost:
$0
Close Date:
Recommendation 1.3

We recommend that MCC Department of Compact Implementation and Division of Finance:
Develop training for MCA Fiscal Agents to ensure proper reporting of re-disbursements on the QFRs to ensure the MCA is only requesting advances for immediate funding needs.
Develop a tracking mechanism to monitor prepayments and to ensure that MCC and NBC personnel are properly reviewing the quarterly submitted QFRs for proper reporting of both the projected needs for advancement of funds and actual re-disbursements of previously advanced funds.

Questioned Cost:
$0
Close Date:
Recommendation 2

We recommend that the MCC Division of Finance:
Strengthen its quality control reviews over financial statements, notes, and other information presented, to ensure the information received is accurate, complete, and complies with accounting standards and reporting guidance.
Increase communication with USAID to ensure information received has been reviewed and is reliable, in order for MCC to prepare complete and accurate financial statements in accordance with accounting standards and reporting guidance.

Questioned Cost:
$0
Close Date:
Recommendation 3.1

We recommend that the MCC Division of HR:
Ensure all HR personnel are aware of the requirement to document and retain the employee exit form in the OPF. In addition, direct HR personnel to obtain completed employee exit form from the Division of Security in a timely manner and document it properly in the employee's OPF.
Direct HR personnel to follow up on all missing items when performing the OPF audits and completing the Purged OPF Check List
Develop and implement a process to monitor and ensure that HR and/or NBC personnel are completing leave audits as required and processing payments for amounts due to, or amounts owed by, separating employees on a timely basis.

Questioned Cost:
$0
Close Date:
Recommendation 3.2

We recommend that the MCC Division of HR:
Review its current policies and procedures to ensure that proper authorization and approval of personnel actions are clearly documented on the required forms prior to processing.
Direct HR personnel to adhere to the documented policies and procedures when preparing, reviewing, and approving personnel actions, to ensure reviews and approvals are properly documented.
Provide the necessary training to responsible HR personnel to ensure that they are aware of the need for properly documenting reviews and approvals of personnel transactions.

Questioned Cost:
$0
Close Date:
Recommendation 3.3

We recommend that the MCC Division of HR:
Establish a consistent tracking mechanism or other historical file for MCC employees to document all changes in employee benefits that are not documented using standard forms or Employee Express.
Revise current policies and procedures to ensure that supporting documentation for all transactions processed by HR personnel on behalf of MCC employees are clearly documented either in the OPF or other historical file, and are readily available for examination.

Questioned Cost:
$0
Close Date:
Recommendation 4

We recommend that MCC Division of Finance:
Continue to strengthen, and revise as necessary, policies and procedures for yearend accruals to ensure that all countries, types of funding, and programs are considered when recording estimates for future expenses, and that accruals are reasonably sufficient to cover anticipated costs.
Establish and communicate procedures for the MCAs to require the submission of estimates or payment requests for current period expenses that have not, or will not be recorded until the subsequent year, for each fund type.
Ensure that the accrual amount is adequately and reasonably calculated, clearly documented and supported, and properly reviewed for completeness and accuracy prior to and subsequently after posting to the GL.

Questioned Cost:
$0
Close Date:
Recommendation 5

We recommend that the MCC Division of Finance:
Inquire of USAID's procedures to resolve the issue of incomplete SF 224 reporting.
Consider revisions to the Memorandum of Agreement (MOA) with USAID to require timely responses upon inquiry by MCC management regarding financial statement audit findings related to Threshold Program transactions.

Questioned Cost:
$0
Close Date: